The 'dots' signal rate hikes are coming this year

The Federal Reserve just released their most recent statement on
monetary policy.

In addition to the statement, the Federal Open Market Committee
(FOMC) released its projections on where they think the economy
will be heading in the next few years.

The "dot plot," part of the FOMC's
Summary of Economic Projections released along with the
policy decision statement, shows where each participant in the
meeting thinks the federal funds rate should be at the end of the
year for the next few years and in the longer run.

While the "dot plot" is not an official policy tool, it provides
some insight into how the committee members feel about economic
and monetary conditions going forward.

The new dot plot shows that all 17 members expect that the
appropriate federal funds rate for the end of 2015 should be
under 1%, with the median member seeing rates between 0.5% and
0.75%. That would appear to signal an end to zero interest rate
policy, and thus rate hikes later this year.

The last
dot plot, from March, was also relatively dovish. The median
FOMC member saw rates at the end of 2015 being between just 0.5%
and 0.75%.

"The June FOMC 'dot plot' showed a larger­-than­-expected drift
downward in projections for the fed funds rate at the end of
2015," Goldman Sachs' economists wrote. "Although the median dot
remained consistent with a September hike, the 'leadership dots'
appear to be split between one and two hikes this year."

Using the current dot plot and the March plot, Business Insider
put together this chart comparing the dots over the last two
meetings. The March dots are in green, and the June dots are in
purple: